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California Electric Restructuring Update

Fortnightly Magazine - July 15 1997

billing, metering and other related services. Under the ruling, new market entrants who use consolidated billing will be responsible for all payments including new statewide surcharges for competition, transition costs and public goods services provided by electric companies. The commission said it would identify the costs those distribution utilities save when they no longer provide the billing and metering services for direct-access customers. It would then remove those costs from regulated rates.

The commission concluded that the competitive provision of metering services would expand the benefits of hourly pricing created in the new power exchange to as many customers as possible. Similarly, the commission decided to permit utilities to modify their existing meters system-wide with automated meter reading technology. The new technology would allow customers to learn about their hourly consumption patterns and to use the information with new hourly tariffs to lower their bills. Under the ruling, the decision whether to install the AMR technology is left to the utilities and only those customers who chose the new billing option will be required to contribute to the cost of the upgrades.

Southern California Edison had requested permission to provide AMR technology for 85 percent of its customers at ratepayers' expense. The commission rejected Edison's claim that a utility-sponsored AMR program would best aid in the development of the direct-access market. It found that ratepayer funding of the effort might discourage customers from investing in competing technologies. The commission also noted that load patterns could determine billing patterns for customers without AMR capabilities. Re Proposed Policies Governing Restructuring California's Electric Services Industry and Reforming Regulation, R.94-04-031, Decision 97-05-039, May 6, 1997 (Cal.P.U.C.).

Consumer Education. In March, the commission had approved the recommendation of PG&E, SDG&E, and Edison to form a joint, statewide education program. Through the program, the companies would inform consumers about changes in the electric industry and give them information to compare and select among new products and services. The commission had already ruled as a matter of policy that consumer education efforts must be put in place "well before direct access is allowed to begin."

Under the approved plan, the utilities will cull a cross section of interested electric industry participants to form the Electric Restructuring Education Group. To ensure that the group furthers its restructuring goals, the commission identified a list of 14 categories of participants that must join the utility-sponsored group. The categories include investor-owned utilities, municipal utilities, nonutility service providers, and consumer, environmental and large-user advocates.

The commission also established an educational trust to take over the duties of the consumer education program once direct access is set up. The trust will target those customer classes "whose members have not generally availed themselves of the direct access option," the commission said. Re Proposed Policies Governing Restructuring California's Electric Services Industry and Reforming Regulation, R.94-04-031, Decision 97-03-069, March 31, 1997 (Cal.P.U.C.).

Related Issues. The commission issued a series of rulings regarding its role in transmission system reliability and related market power issues. It also clarified its plan for cost recovery related to the operation of fossil-fueled generating